So far, so good, you might think. But don't go getting all excited about figuring out whether he's been reading the Murray Rothbard or not. He breaks that happy illusion with the next comment:
However, he added that such a prolonged decline was not inevitable because interest rates had been cut sharply.To once again re-use my favourite words from Miss Hermione Granger, "What an Idiot".
What is it with these people? They seem to be rational all the way up to the point where they think wealth can be created on a printing press. They ignore the Mississippi Bubble, the Weimar Republic, and the happy land of Zimbabwe.
Sir John is even prescient enough to realise that our most likely outcome has already been modelled for us in Japan, in the most clear-cut failure of Keynesian economics ever to be tried out in an experimental test-tube.
And yet the blind spot in his brain misses the fact that the Japanese had effective zero percent interest rates for a decade, and this did not help even them, one of the most productive, thrifty, and hardest working societies in the world.
Somehow, because many Britons in our Chav Nation are fat, lazy, unproductive, addicted to welfare, and spend borrowed money like water, we will be immune from the same failed catharsis of easy money which plunged the Japanese into ten years of Keynesian-induced hell.
Ten years? At the rate we are going with the printing press, make it more like twenty.
So I'll say it again, in case Sir John is reading, and just to avoid being labelled as nothing but a doom and gloom merchant.
There is a way out of this. Because we are so late in the game it will probably take five years, rather than the two years it would have taken if we had let HBOS and RBS go to the wall. But five years is way better than ten.
Before I start, I must point out that I am an anarchist and that I want the entire government abolished. However, I recognise that this is ...ahem... a minority position. Therefore the following plan has 'sensibleness' built into it. That is, it is a program which a radical British government could follow, in the mould of Her Blessedness, Margaret Thatcher, without privatising the NHS, the police, or schools, and without drastically altering welfare benefits.
=> We must stop inflating. Immediately.
=> No bailouts. If companies fail, including banks, they fail. End of story. Liquidators can assign their assets to the best outcomes.
=> We must stop borrowing. Immediately.
=> We must aggressively start cutting government spending with radical surgery. We should start particularly with all state non-jobs linked to wealth-restricting regulation, but keep the axe rolling across every government department and local council until the cancer of waste is removed. These people are supposed to be there to serve us. Unless there is a clear case that they do serve us, such as being a doctor, a nurse, or something obviously useful, we should sack them.
=> No more state posts should be advertised in the Guardian. There should be a complete cessation of hiring any more state workers in any non-frontline service. Exceptions to be made to genuinely useful people, such as doctors, nurses, etc, but only on a replacement basis of one in, one out. For every other department, it is one out, one out.
=> We should cancel all forthcoming government projects to expand the state and spend untold billions, such as the ID card project.
=> We should cancel the NHS IT project immediately and just carry on with what we have in place.
=> We should give the Olympics back to the IOC and tell them we are sorry. The Olympics are not a sacrosanct sacred cow which must keep going forever. They are a sporting event subject to market forces. If nobody else wants to pick them up, tough. (Though Beijing II would be the obvious destination.) The world survived without the Olympics for 2,000 years. I'm sure it can survive an eight-year gap, if the Chinese refuse to run a replay.
=> We should start shredding government regulations, particularly any which restrict the ability of entrepreneurs to generate wealth or which decrease the desirability of Britain as a place to build factories in.
=> We should abolish all investment taxes, and pay for these cuts with real government spending cuts. For example, interest received taxes, inheritance taxes, capital gains taxes, stamp duty taxes, corporation taxes, etc. We should sack all Inland Revenue staff associated with collecting these taxes.
=> We should abolish the tax credit system and give everybody a simple tax cut instead. The tens of thousands of Inland Revenue staff involved with tax credits should be sacked immediately.
=> We should aim to make Britain as attractive a place to invest in as Hong Kong, Singapore, or Dubai. For cripes sake, Dubai is a desert with massive humidity and massive heat, little attractive land, and still it's a more attractive proposition than a cool sunlit green fertile island. This is madness.
=> All government final salary pension schemes to be frozen with immediate effect. All remaining government workers to build up any ongoing pension rights with defined contribution pensions, like the rest of us. As well as saving the tax paying class an absolute fortune to invest more wisely, this will at a stroke give everyone in the country the same motivation to build a prosperous economy.
=> Anything which can be privatised, should be privatised, and privatised properly, not left with stupid government legacy hangovers, such as the appalling mess created in the railway industry. The rail industry should be fully freed and shall henceforward receive no subsidy. The BBC should be privatised. Northern Rock, Bradford and Bingley, RBS, HBOS, and any other nationalised bank, should be sold off for whatever the government can get, even if it's one penny. The proceeds to be fed directly into the welfare fund to help people survive this recession, and not into expanding other government programs.
=> We should cease all government aid programs with immediate effect. (Why I am taxed so that Gordon Brown can then send the money to Indian billionaires to build more factories in India to out-compete British ones, is a mystery which has yet to be explained to me.) The money saved to be fed into the welfare fund to keep British people going through this enormous re-adjustment.
=> We should modify the terms of our engagement with the EU to the same status as Norway. That is, none of the governmental nonsense, but with all of the free trade benefits.
=> We should allow the unfettered circulation of tax-free gold and silver coinage from whichever private institutions wish to circulate them and allow people to sign legally-binding contracts based upon these gold and silver monies.
=> The government to issue an unfettered tax-free gold pound and silver pound to both sit alongside the paper pound, to compete with it freely in the legally-bound contracts marketplace. We will let the market decide which pound it prefers, over time. In ten years time, we abolish whichever of these three pounds is the least popular. (No prizes for guessing which one I think it will be!)
All of the above will be a good start, although I may have missed a few things off. Essentially, we need to get the government off our backs, stop inflating, and stop wasting money on unproductive junk. Once we have done so and we can create factories making world-class goods at world-competitive prices, then we shall be able to progress forward again.
Although possibly on the outer edges of what the Westminster Village would consider 'extreme', the above plan is just about possible, given a politician of sufficient stature.
Now all we need is that politician to step forward with the vision, the charisma, and the sheer bloody-minded toughness to pull it off.
Will the next Margaret Thatcher or English Ron Paul please stand up! We really need you.